Chapter 3: Article Two: Sales

Annual Survey of Massachusetts Law Volume 1957 1-1-1957 Chapter 3: Article Two: Sales William E. Hogan Follow this and additional works at: http://lawdigitalcommons.bc.edu/asml Part of the Commercial Law Commons Recommended Citation Hogan, William E. (1957) "Chapter 3: Article Two: Sales," Annual Survey of Massachusetts Law: Vol. 1957, Article 7. Article 7 Hogan: Chapter 3: Article Two: Sales CHAPTER 3 Article Two: Sales WILLIAM E. HOGAN §3.1. General. A major incentive of the entire Code project was a desire of various business groups for the modernization of the Uniform Sales Act, and the first years of effort were devoted to the drafting of the predecessors of the present Article 2, Sales. 1 In many cases the Sales Article restates or clarifies the statement of the prior law; in some it furnishes criteria for deciding cases not previously covered by statute; and in others it rejects the old approach and develops new methods of handling problems. The purpose of this chapter is to offer an introduction to the Code's new methodology and some of its substantive provisions in the light of Massachusetts law. One caution must be raised at the outset: an emphasis here upon novelty should not obscure the fact that the Code in large measure clarifies or restates existing law. §3.2. Offer-acceptance and the Statute of Frauds. The Uniform Sales Act has little to say about the formation of the contract between the seller and the buyer. The problems of offer and acceptance, consideration, and modification have been lumped into the total mass of contract law. 1 The Code departs from this notion and establishes some statutory criteria for the solution of these questions in the sale of goods area. For the most part the new rules are formulated upon the notion that the reasonable expectations of the parties in a commercial deal should be effectuated by the law. A not-so-hypothetical case may be useful in treating a representative problem under the Code. 2 A is trying to obtain a contract to furnish bus transportation for school children. Before bidding on the contract, A needs to ascertain WILLIAM E. HOGAN is Assistant Professor of Law at Boston College Law School. and is a member of the Massachusetts Bar. He was formerly Special Assistant to the Chief of the Armed Services Medical Procurement Agency. He participated in formulating the Massachusetts Annotations to the Uniform Commercial Code. §3.I. 1 Report of the Uniform Commercial Acts Section, Handbook of the National Conference of Commissioners on Uniform State Laws and Proceedings 89 (1940). §3.2. 1 General Laws, c. 106, §5, Uniform Sales Act (hereinafter cited "USA") §3. provides: "A contract ,to sell or a sale may be in writing, either with or without seal, or by word of mouth, or partly in writing and partly by word of mouth, or may be inferred from the conduct of the parties." 2 Kuzmeskus v. Pickup Motor Co., Inc., 330 Mass. 490. 115 N.E.2d 461 (1953). Published by Digital Commons @ Boston College Law School, 1957 1 Annual Survey of Massachusetts Law, Vol. 1957 [1957], Art. 7 §3.2 UNIFORM COMMERCIAL CODE: ART. 2 15 the cost of performing. A contacts B, a dealer in buses, to determine the cost of obtaining five new buses which will be required under the transportation contract. B makes a written offer describing the vehicles and stating his price, closing with the statement "This is a firm offer and will remain open for sixty days." Within a week A, having carefully calculated his bid based on B's offer, is awarded the transportation contract. B telephones A the following day and withdraws his offer because of a price increase. A then insists on the prior offer and tells B it is accepted. Under the present law a lawyer consulted by A might think that since the offer by B was neither under seal nor supported by consideration, it could not now ripen into a contract by A's acceptance. It was a revocable offer, revoked prior to acceptance. If A's lawyer were operating under the Code, he would find that Section 2-203 eliminates the seal as a means of giving permanency to the offer in sales contracts. But in a Code jurisdiction, A's lawyer would have to consider Section 2-205. 3 Here the inquiry is different. Is the offeror a merchant? Is the offer in a signed writing? Does it by its terms give assurance that it will be held open? Will the acceptance occur within the time stated or, if none is indicated, within a reasonable time? In any event will the acceptance occur within three months? If each of these questions is answered affirmatively, the offeree's power of acceptance is preserved. Thus freedom of contract is still maintained. The offeror is in full control of his offer but he takes the risk of giving written assurances that it will remain open. The time limit for acceptance is also within the offeror's control, but in no event may the period of irrevocability exceed three months. Finally, the offeror must be a professional, that is, a "merchant." Here is another new concept of the Code, that there should be different rules of law governing the conduct of the professional. This notion deserves special treatment and we shall return it to frequently. Section 2-104 defines the term "merchant" in language not unlike the concept of "dealer" in the present law relating to the warranty of merchantability.4 Let us now reverse our hypothetical case. If B, the seller, had furnished A, the buyer, with a printed order form containing a stipulation that the buyer's offer was to remain open for sixty days, would the 3 Section 2-205 provides: "Firm Offers. An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror." 4 Section 2-104 provides: "(I) 'Merchant' means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skilL" http://lawdigitalcommons.bc.edu/asml/vol1957/iss1/7 2 Hogan: Chapter 3: Article Two: Sales 16 I j. I l I I I I 1957 ANNUAL SURVEY OF MASSACHUSETTS LAW §3.2 seller have a power of acceptance for that period? It seems that the first inquiry would examine A's status as a merchant. Even then the Code protects unwary parties using printed forms supplied by the other party by insisting that in these cases the provision giving duration to the offer be separately signed. This is one inroad into the doctrine of consideration found in the Code' (...truncated)